Q Mr. President, thank you very much for your time, as always, and thank
you for the interview.

THE PRESIDENT: Thank you.

Q The major obstacle to peace is the settlement activities. Would you
request from Prime Minister Olmert a freeze on the settlements?

THE PRESIDENT: I think the major obstacle to peace is going to be the
politics of both Palestinians and Israelis trying to take advantage of the
difficult work that these two leaders are going to have to do to define a
state; that's what I think. I think that extremists, in some instances,
will try to stop the peace. I believe there is a lot of forces at play in
Israel that will try to stop these two men from defining what a state will
look like. And my job is to help them stay on the big picture, and have
the confidence necessary to make tough decisions.

No question the settlement activity is a problem. But there's a mechanism
to deal with that, and that is the road map commission, for the best word
-- is the trilateral commission, which we head, to deal with these road map
issues. Now, we can solve those -- we can work through those problems, but
the key is to define a state. Now is the time. And I believe it's going
to get done before my presidency is over. And the reason I believe it is
because these two men, with whom I've spent a fair amount of time, are
committed. The state will come into being subject to a road map. But the
first step is to define what is possible, here's what a state will look
like. And that is very important for both the Palestinians and the
Israelis.

Q Well, in this case, what is exactly your strategy to implement your
vision of a Palestinian state by 2008?

THE PRESIDENT: Well, the key is for me to convince the two leaders to work
through the hard issues. I'll help them, but in order for there to be
lasting peace, they've got to come to the table, they have got to negotiate
it. And what ends up happening in this process is that the leaders will
commit, and then they'll get their committees to work, and it gets stuck.
And that's when I'll have to work with Condi Rice to unstick it, to keep it
moving.

One thing is, is that they know that they've got a good partner in peace in
me. They also know that I'm not going to be in office a year from now, so
there's a certain urgency to get this state defined. My trip is going to
be to kind of keep momentum. The Annapolis Conference was a successful
conference for two reasons: One, it was a chance for the Palestinians and
the Israelis to know that the United States is serious about helping them,
and equally importantly, it gave the world a chance to come to the table.
The rest of the Middle East was there. And that's an important movement.
It's going to be important for both Israel and the Palestinians to know
that an agreement they reach will be supported by the Middle East.

And so part of my -- one of the goals of my trip is to remind our friends
and allies in the Middle East that they have got to be supportive of the
Middle East peace process, as well. They're going to want to know whether
or not I'm going to push. And I'm going to want to know -- and I'm going
to tell them, yes, I am, but we expect you to be constructive players, too.

Q Exactly, but can you elaborate a little bit about this? What more can
you do? I mean, support is enough? One visit is enough? Will you be --

THE PRESIDENT: But, you see, to get it to this place -- a visit is
important, but I'm on the phone a lot, and Condi is on the phone a lot.
There's a little -- visits are important, obviously. And there's a reason
why the timing of this visit is what it is it. I mean, there was an
intifada when I first came into office. Secondly, there is a philosophical
change about a two-state solution. I mean, I supported it as the first
American President ever to support it. The Israelis, under Ariel Sharon,
came to the conclusion that this is in their interests.

We're pushing a lot, let me put it to you that way. I repeat to you,
though, the notion that somehow America can impose its will on two parties,
I don't think it works. I think America can facilitate. I hope that as a
result of this interview and my trip, that people come away with the notion
that George Bush understands now is the time to move.

Q People know that you are close friend of Israel. What do you want to
do to win hearts and minds of the Palestinians, to assure them that the
United States is a fair broker in the peace process?

THE PRESIDENT: You know, I've heard that. I've heard that, well, George
Bush is so pro-Israeli he doesn't -- he can't possibly care about the
plight of the Palestinian person. I would hope that my record, one of
liberation and -- liberation, by the way, not only from dictatorship, but
from disease around the world, like HIV/AIDS or malaria -- is one that will
say to people, he cares about the human condition; that he cares about each
individual; that my religion teaches me to love your neighbor.

I have spoken clearly about my belief that -- I pray to the same God as a
Muslim prays; that the freedom agenda is really aimed at liberating people,
and that the hope is, is that there will be an active, real Palestinian
state, so people can realize their dreams. But they're going to have to be
-- they're going to have to do some work. They're going to have to have
security forces that protect the average person. They're going to have to
have institutions that bring confidence for the Palestinians. They have to
have the ability to attract investment. The Palestinians are great
entrepreneurs, and if just given a chance, I'm confident the business
community will flourish. Most importantly, though, they're going to have
to reject the extremists who murder innocent people. And by the way, we're
engaged in a great ideological struggle.

Q Absolutely. I mean, in this retrospect, would you regret not being
involved earlier in the peace process, seven years ago?

THE PRESIDENT: I think that you would find that I have been very much
involved in the peace process when you look at the facts. I mean,
attitudinal changes don't happen overnight. And the reason we've been able
to have this successful conference at Annapolis is because people's
attitudes lined up kind of in the same direction. There was common
interests -- common ground has been now recognized. The two-state solution
wasn't accepted for the first --

Q So this is the right time, you say?

THE PRESIDENT: -- for the couple of years of my administration. It took a
while to convince people that the two-state solution was in the security
interests of both parties. And plus, there was a couple of difficult --
there was a difficult situation, the truth be known. One was the intifada,
which made it awfully hard to discuss peace at that time. The other was
the Iraq invasion. It just -- it created the conditions that made it more
difficult to get people's minds in the right place to begin the process.
And so now I think we've got the stars lined up, and I think we got a shot,
and I'm going for it.

Q Great. I know he's telling me --

THE PRESIDENT: You're fine. Go ahead.

Q Thank you, sir. Part of the visit, as well, is Iran and the Gulf
states. What exactly do you want from the Gulf states regarding Iran? And
would you ask for their cooperation in case of a military strike?

THE PRESIDENT: First of all, I will assure the Gulf states that I believe
we can solve this problem diplomatically. Secondly, I will -- they're
going to want more from me than I'm going to want from them; they're going
to want to know what this NIE was all about.

Q Exactly.

THE PRESIDENT: And I'm going to remind them that at my press conference
when I explained the NIE, I clearly said Iran was, is, and will be a danger
if they're allowed to enrich, because they can take the knowledge on how to
enrich and convert it to a covert program. If they've had one -- a program
once, they can easily start a program.

And so I view the Iranian regime as a danger. I also believe that the
Iranian people are not bad -- they're good people, and that they can have a
better way forward. We'll tell our -- I'm sure the -- our friends and
allies will say, well, what are you going to do about it? It's one thing
to define the problem; do you have a strategy? And if you say you can
solve it diplomatically, what is your strategy? And I'll explain the
strategy of economic isolation, that -- you know, it's sad, we really don't
need to have to be in this position. If the Iranian government would
suspend their enrichment program, like the international community has
demanded, there's a better way forward for them. But they say that they
need this program, and my answer is, is that if you need it, then why
haven't you been transparent and disclosed it, an honest about it? And
what were you doing with a military -- secret military program in the first
place?

And so I view Iran as a danger, I truly do. And I don't view the people as
a danger, I view the government as a danger.

Q Of course. But will it be harder to try to convince the Gulf states
what -- the American position after the intelligence report?

THE PRESIDENT: The fact that I'm having to explain it means it's harder
after the report. But I believe I'll be able to convince them. What they
want to know is whether or not I think they're a danger. They know Iran
can be a danger. They want to know whether I think it's a danger, and are
we committed to helping people achieve security. And part of the trip is
to tell people, yes, we've got -- we are engaged to help you, if you want
our help, to enhance security. And part of the trip is to tell people,
yes, we're engaged to help you, if you want our help, to enhance security.

Now, look, nobody wants to be dictated to, and I'm certainly not going to
do that. I am there to reassure and to look people in the eye and say, I
believe Iran is a threat; we have a strategy to deal with it; and we want
to work with you.

Q Did you ever discuss a military option with the Gulf states?

THE PRESIDENT: Will I ever do that?

Q Did you, or will you?

THE PRESIDENT: No, I haven't, because I believe we can solve this
diplomatically. On the other hand, as you've heard me say many times since
you've covered the White House, all options must be on the table in order
to make sure diplomacy is effective.

Q Absolutely. Secretary Gates told Al-Arabiya in an interview recently
that the diplomatic option is still 100 percent in focus. Does that mean
that you're going to still pressure Iran on the diplomatic front? And how
far can you go before your patience will run out?

THE PRESIDENT: We definitely will continue to pressure them on the
diplomatic front. And it's hard, because sometimes people are more
interested in market share for their goods than they are for achieving
peace. And so I've spent a lot of time with allies in Europe, for example,
convincing them of the importance of working together to send a common to
the Iranian regime. So, yes, the diplomatic option is on the table and
it's active and we're working hard.

Q On the Syria issue -- I don't know if I'm allowed to ask one --

THE PRESIDENT: Keep going. All you got to do is ask; I'll handle it.
(Laughter.)

Q Thank you. On the Syria issue, I mean, we already talked about -- you
actually told me that you -- patience with Assad is running out. But we
still have no Lebanese elections. What does it mean? What can you do? Is
it negotiation? Is it a military strike? Is it sanctions against Syria?
What can you do?

THE PRESIDENT: Well, what we can do is make sure that the world
understands our position and try to convince them that we ought to work
together to say to the Syrians, let Sleiman go forward. That's the
President that the people want there in Beirut, and he ought to go forward.
And that's going to be on my agenda when I talk to friends and allies in
the Middle East, that -- and we can collectively send the message to
President Assad.

We've sanctioned Syria, and I'm looking at different ways to keep sending a
tough message, because so far, he has shown no willingness to be
constructive on Lebanon or in dealing with a militant Hamas or in stopping
suiciders from heading into Iraq. In other words, some reasonable things
that we would like to see done in order to improve relations, which he has
not done.

We're working very carefully -- closely with the French, for example. I've
had a conversation with President Sarkozy on the subject. I'll be talking
to my friend King Abdallah of Saudi Arabia on the subject, who has got a
very keen interest in seeing to it that the Lebanese democracy goes
forward. And so we've got a very good chance to have a more focused,
concerted, universal message that President Assad, I hope, will listen to.

Q But some will say they might wait for another year until you leave
office, and then --

THE PRESIDENT: Well, he could try to -- but in the meantime, there will be
others around who he will have irritated as a result of his stubbornness.
And so, yes, I mean, he could try to wait me out, but there's other leaders
in the world that are as equally concerned as I am about Syria not letting
the presidency go forward and really hurting this very important democracy
in the Middle East.

Lebanon's survival as a democracy is, in my judgment, very important for
the world. And Syria is -- has been -- when we passed the resolution out
of the United Nations, it worked. President Chirac and I worked together,
got our foreign ministries working together, and it worked. And yet, as
opposed to honoring the notion of staying out of -- and to stop obstructing
politics, Syria just has not been helpful at all.

Q So will you impose sanctions on Syria?

THE PRESIDENT: We have already, and we're looking at different options, of
course.

Q A tougher sanction.

THE PRESIDENT: We're always looking for ways to make sure that we're
effective. It's -- sanctions, individual sanctions are okay. They're much
more effective when they're -- other people join along.

Q Absolutely. To show that you actually support Prime Minister Siniora,
why you're not visiting Lebanon on this trip?

THE PRESIDENT: A good question. You have to just -- there's only so much
time. There's other countries I won't be going to either. We've had
plenty of high-ranking officials go to support Prime Minister Siniora. I
think about Condi, and I think about Admiral Fallon, who I sent over there
to help analyze what the Lebanese forces need.

Listen, I was very impressed when Prime Minister Siniora made the decision
to move Lebanese forces into an extremist stronghold and dealt with them.
That's what you're supposed to do. And in order to have a safe and secure
society, the state has got to show that it can provide security for the
people and not tolerate pockets of extreme radicals who are murderers in
their intentions, and he did. And right after that I sent Admiral Fallon
in to say, look, we need to help strengthen this man. He showed courage
and leadership, and he needs to have a military that is able to function at
the behest of a state, to provide security, and so we're in the process of
inventory and analyzing to see how we can help from that perspective.

Q But do you hope the election will go forward in Lebanon?

THE PRESIDENT: Soon. I was hoping it would go forward last week. They
keep delaying it, and I'm convinced a lot of it has to do with the fact
that Syria is not helpful. Therefore, part of our strategy is to get
others to send the same message that I've consistently been sending to
President Assad: If you want to be isolated, if you want to be -- or if
you want -- you have a choice: Do you want to be isolated or a part of the
world? You can make the choice. You can hang out with a limited number of
friends, like Iran, or you can have better relations in the neighborhood
and in the world. It's your choice to make.

Step one is to get out of the way of these presidential elections. They've
got a good candidate. A lot of people agree that this is the person, and
now Syria needs to get out of the way.

Q Sir, on the Iraq issue, the security has improved. Does that mean
you're going to withdraw troops by the end of the year?

THE PRESIDENT: Our troops decisions will be made based upon the considered
recommendations of our commanders. Success in Iraq is essential, and,
therefore, I'll make the decisions along with those recommendations based
upon success. The surge has been successful. The economy is getting
better, and the politics is getting better. There is still a lot of work
to be done, however, and I am -- you know what thrills me the most is that
the average Iraqi's life is becoming more hopeful.

Here's what I tell people, I tell people here in America that an Iraqi
mother wants the same thing for her children that an American mother wants:
A chance for the child to grow up in peace and to realize dreams; a chance
for the child to go outside and play and not fear harm. And it's beginning
to happen. The average -- you know, it's still tough. There's still too
many suiciders, but the level of violence is declining. I didn't see this,
but I was told that the celebrations at New Year's Eve in Baghdad were
festive, and life is coming back and it's -- that's exciting to me.

Q And just to follow up on that, the generals were saying that Iran and
Syria actually has been playing a role in stopping the suiciders of coming
to Iraq. Would you credit them for that at least?

THE PRESIDENT: I'm not willing to credit the Iranians yet. I don't have
enough evidence. One general said that, then he corrected his story. I
think so long as we're finding sophisticated IEDs -- that could only have
been manufactured in Iran -- that are killing innocent people inside Iraq,
that's cause for concern. I'm willing to have dialogues with the Iranians
about Iraq in Iraq, but our message will be, if we catch you providing arms
and trained -- training people, then we'll -- we're going to hold them to
account. You just got to understand that.

I would give -- if, in fact, Syria is trying to stop suiciders, I will give
them credit, of course. I hope that's the case. It's certainly one way to
begin to earn better relations with the United States, is to stop the
exportation of suiciders who go kill innocent people. I'm looking forward
to the trip. I'm glad you're going.

Q Me, too. Finally, how do you want the people in the Middle East to
remember you, sir?

THE PRESIDENT: History is odd. I will be long gone before the true
history of the Bush administration is written. I'm still reading analyses
of Abraham Lincoln's presidency. I would hope, at least, at the very
minimum, people would say that George W. Bush respected my religion, and
has great concern for the human condition; that he hurts when he sees
poverty and hopelessness; that he's a realistic guy, because he understands
that the only way that these extremists who murder the innocent can recruit
is when you find -- when they find hopeless situations -- they have no
vision that's positive; and that he helped present an alternative, and that
was one based upon liberty and the rights of men and women in a just and
free society. That's how I hope you remember me.

Q Thank you very much, sir, for your time and for your generosity.
Thank you very much.